The federal trade commission has approved the $5 billion deal between Nvidia and Intel, allowing the two chipmakers to proceed with a strategic partnership to sell semiconductor chips in competition with other manufacturers. The collaboration was first announced in September and required clearance from federal antitrust authorities before moving forward, with the commission posting its approval notice on Thursday. The nation’s consumer protection agency did not provide an explanation for why it granted the Nvidia and Intel deal.
Under the agreement, Nvidia invested $5 billion in Intel stock at a purchase price of $23.28 per share in order to collaborate with Intel on developing artificial intelligence and chips for next-generation personal computing products and data centers. The arrangement pairs Nvidia’s graphics processing units with Intel’s central processing units to mount a stronger challenge to rivals including Taiwan semiconductor manufacturing company and United States based AMD. The approval indicates that regulators do not view the structure of this partnership as an immediate antitrust violation, even as both companies expand their presence in data center hardware.
Nvidia’s market dominance in artificial intelligence has fueled scrutiny, as the company is estimated to control 85% to 95% of the data center GPU market, and its role in the artificial intelligence sector would be further strengthened if its deal with Intel moves ahead as planned. In 2022, the federal trade commission successfully blocked Nvidia from merging with United Kingdom based chip designer Arm in a $40 billion transaction, but in the current case Nvidia is not merging with Intel. The Reuters report on the commission’s decision on Friday coincided with a significant stock boost for both Nvidia and Intel. Separately, the article notes that the federal government obtained a 10% equity stake in Intel one month before Nvidia announced its $5 billion stake, and that President Donald Trump recently signaled he would permit Nvidia to sell its advanced H200 computer chip to commercial customers in China as the administration reviews the sale.
